Fraud Employee Referral Program supported by Fraud HR Manager.

Fraud Employee Referral Program OR Buddy Referral Program.

Employee Buddy Referral is now considered as one of the best referral processes in the process of an interview. Buddy referral is the latest emerging need of every organization which if utilized in right directions can further help a hiring manager to reduce or lower their recruitment cost.

Most of the loyal Hiring Managers or HR Managers try their level best to support employee referral program to the fullest since it helps them to reduce their cost of recruitment thereby diversifying the job load from the recruitment team but there are few HR Managers along with some HR recruiters who don’t want employees to be hired via buddy referral program. (or referred as Fraud Employee Referral Program) Even though there may be a positive flow of energy throughout the organization for such employee hiring referral process but in reality, the HR Managers doesn’t want to hire many candidates using this referral process.

As we all know recruitment cost (Recruitment Budget) is a cost to the company and in the case of recession or any fluctuation in the IT or Non-IT sector, it’s the HR department which suffers the most and are the ones who may be forced to resign first.

Every organization has some budget decided in advance which even the recruitment managers do have. This recruitment cost if utilized in a positive way can prove to be a boon to the entire recruitment team including the HR recruiters as well but If utilized in an unprofessional manner or illegally can cause tremendous issues to the members of the recruitment team as well, which may further can even force an HR to leave their job. This budget is sometimes adjusted in the hiring cost, done via consulting firms.

Let’s understand in detail related to the above points, why does it happen;

1. Connection with consulting firms.

I remember a case in an organization where the HR Manager was not much interested in doing recruitment from the Employee referral process. When researched about this, we came to know that the manager was getting a commission for every hiring done from the consulting firm (usually such Fraud HR Managers have around 10-20% per candidate as commission) Such firms usually experience low employee referral hiring.

2. Commission through Employee Referral Software.

In one of the organization, the HR Manager who was initially not much interested in promoting employee referral process (also called as the Buddy Referral process) suddenly started showing interest.

This is because the HR manager was being offered a handsome commission by one of his direct previous employee who had started his own buddy referral software firm.

Initially, the HR Manager supported buddy referral to some extent but later on started focusing on the commission which he got from the consulting firm, which I already explained above.

3. Internal Buddy Share.

In some organization, there are cases where the HR Manager gets a resume from a candidate and shares the profit of Employee referral between the two. The candidate too shares most of the resumes with such HR Manager directly or indirectly since he is aware that all the resumes won’t be blocked and there will be more probability of getting more conversions.

In such firms, if you send resumes, you get a reply saying either “we already have many candidates in pipeline” or “will consider the preferred candidate in some other drive”.

Such types of frauds are totally eliminated in organizations like Accenture, Infosys, Deloitte, Credit Swiss, etc since there is perfectly design recruitment system because of which the employee referral systems are considered as one of the best methods of hiring.

If you know any such rare frauds done by Managers to demotivate Employee referral system, then feel free to update below in the comments.